United Parcel Service, Inc. (UPS): Jim Cramer Warns About Its High Dividend Yield

We recently published 13 Stocks That Jim Cramer Discussed. United Parcel Service, Inc. (NYSE:UPS) is one of the stocks Jim Cramer recently discussed.

Logistics and courier firm United Parcel Service, Inc. (NYSE:UPS)’s shares have lost a painful 31.6% year-to-date. Since late July alone, the shares have lost 18.4%, following a selloff that media reports attributed to the firm’s second-quarter earnings report in July. United Parcel Service, Inc. (NYSE:UPS)’s adjusted EPS during the second quarter dropped to $1.55 from the year-ago figures of $1.79 due to the Trump administration’s de minimis tariffs on Chinese imports. Cramer commented on how the dip in share prices made him uncomfortable about United Parcel Service, Inc. (NYSE:UPS):

Leonard Zhukovsky / Shutterstock.com

“Yields 7.8. My friend Herb Greenberg, who’s on a blog now, did say that he felt the dividend was very great. Very great, very great. . .and that would something that Carol Tome has said you know. . .sacrosanct, but when the numbers from this de minimis, you get a big decline in international, which isn’t good for them. I think you start saying well listen, you gotta hedge, I don’t know. Because when you 7.85% yield, David, you know this, that is a red flag, that’s not like wow. . .it can be a bad sign.”

Here are Cramer’s previous thoughts about United Parcel Service, Inc. (NYSE:UPS):

“Average daily unit volume declined by 7%. Now, I know that UPS had its problems. Its profitability’s been hurt by the labor agreement the company reached two years ago. Its pivot to cut dependence on Amazon traffic hurt. But Big Brown is a huge company that controls a major chunk of American shipping. So when its stock plunges more than 10%, I regard that as frightening. Not only did UPS present plenty of evidence of a weakening consumer, it also documented how the tariffs are already beginning to hurt consumer sentiment and consumer spending.

Now, it kind of took my breath away when CEO Tomé pointed to some very strong business between lots of countries that did not include the United States. It was among the first quarters where I heard the damages being done to American commerce by our tariffs, damage that’s not being replicated in country-to-country business that are not impacted by new tariffs.”

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.